In this second revision of our application, we addressed the reviewers' questions about our comparison condition and several other design issues, and propose a 5-year study of the efficacy of Contextual Emotion Regulation Therapy (CERT), a novel intervention for childhood depression. CERT is an empirically based, developmentally sensitive treatment that targets emotion regulation response skills in depressed children, and deploys parents as co-therapists; parents are taught to effectively coach their children in various tasks, including developmentally appropriate use of emotion regulatory strategies in response to experiencing distress/dysphoria. Altogether 100 children, aged 7-12, with a DSM-IV depressive disorder, will be randomly assigned to CERT or Child-Centered Therapy (CCT), a psychotherapy based on Rogerian principles. Both treatments entail 22 sessions, conducted jointly with the parent and child: weekly sessions across the first 4 months are followed by biweekly sessions (across a two month period) to consolidate treatment gains. Both groups will be followed for 1 year after the end of treatment to evaluate the longer-term effects of the interventions. A multi-perspective assessment battery (clinical interviews and ratings, and parent- and child-self rated inventories) will provide the data to test our hypotheses. We hypothesize that CERT will result in more rapid, complete, and sustained recovery from depression than CCT; that symptomatic improvement will be mediated by improvement in children's and parents' self-regulation of dysphoric affect and by improved parent-child relationship; and that treatment outcome will be moderated by baseline clinical characteristics of the child and parental depressive symptoms. An open treatment trial of CERT with 20 children with dysthymic and/or major depressive disorder showed that a high proportion achieved remission, which was sustained across an additional 12 months of follow-up. Our proposed project has great public health significance because childhood depression is a gateway to adult depression, one of the leading causes of disability worldwide, and there are currently no published, empirically validated treatments for clinical depression for referred children aged 12 years and younger.